'Hold' UPL Shares Maintains Nirmal Bang Post Q1 Results — Check Target Price

UPL believes that destocking is over and sees healthy outlook for crop protection chemical consumption. although weak commodity prices still remain a concern. UPL has also reduced Net debt/Ebitda to 2.01x by end-FY25. New products revenue share is likely to rise from $93 million in FY25 to $130 million in FY26E. UPL SAS, NA and Europe have shown healthy growth in Q1 FY26.

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Nirmal Bang Report

We retain Hold on UPL Ltd. after its 33% YTD rally, due to muted risk reward after cutting target price by 9% to Rs 659 post roll over to Jun’27E. We have cut estimates in FY26E/27E by 43.6%/18.5%, to align FY26E revenue growth with management guidance of 4-8%, as well as the Q1 FY26 results.

Our new target price is based on unchanged P/E of 12.1x on Jun’27E vs 5-year median P/E of 16.2x. The management guided for 4-8% topline growth, and 10-14% Ebitda growth, while hinting at improved outlook for topline growth/margins in H2 FY26E, particularly in Latam.

UPL also said that it does not have major exposure to US tariff. Other management comments: Fitch and S&P have upgraded UPL’s credit rating.

There are signs of stability in CPC prices, with recovery in some products like Mancozeb, and Clethodim.; China excess supply may be slowly abating with signs of capacity rationalisation.

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